MARKET REPORT
July 30, 2013
The Markets had an disappointing session yesterday once
again as it tested its 200-DMA in the second half of the day to end yet another
day with a cut. The Markets opened on a mildly negative note and gave its
intraday high of 5886 in the very early seconds of the trade. The Markets
traded negative in the first half of the session but the trade remained mostly
range bound and with capped losses with no major downside. However, the second
half of the trade saw some more pressure building up as the Markets gave way to
further losses. It went on to give the day’s low of 5825.80 towards the end of
the session. It finally ended the day at 5831.65, posting a net loss of 54.55
points or 0.93% while continuing to form a lower top and lower bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
For today, we are likely to see some respite from the
weakness that we have been seeing. However, today, the levels of 200-DMA would
be extremely critical. We are expected to see mildly positive opening around
the 200-DMA levels and therefore, after opening, the behaviour of the Markets vis-à-vis
the levels of 200-DMA would be critically important. It would be important for
the Markets to move past those levels and trade above that.
For today, the levels of 5853 and 5905 are immediate
resistances on the Charts. The supports come in at 5802 and 5775 levels.
The lead indicators continue to show some weakness. The RSI—Relative
Strength Index on the Daily Charts is 44.1519 and it has reached its lowest
value in last 14-days which is bearish. It has also given its new 14-day low
whereas NIFTY has not yet forming a bearish divergence. The Daily MACD remains
bearish as it trades below its signal line.
On the derivative front, NIFTY Futures added nominal 1.23
lakh shares or 0.93% in Open Interest. At least there has been no shedding of
Open Interest reported. Stock Futures too have added in Net Open Interest. Both
FIIs and DIIs have remain net buyers in Cash and Derivative segments.
Having said this, the Markets are also likely to react to
the RBI policy review. There is a market consensus about its outcome so there
is little chance that the Markets gives it a negative continuing reaction.
There are some chances of some knee jerk reactions but more or less, the
downside remains very sell as most of the banking stocks and banknifty itself
remains oversold.
All and all, we are likely to see some range bound movement
in the morning trade and thereafter might see some directional consensus. We
still continue to advice to strictly avoid shorts and use the downside to pick
selective stocks while avoiding aggressive positions. Even in case of some
negative reaction, the downside in the Markets now remains very limited and the
bias remains on the pullback. Overall, cautious optimism is continued to be
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
